{"id":6580,"date":"2021-09-21T11:55:01","date_gmt":"2021-09-21T06:25:01","guid":{"rendered":"https:\/\/scholarsclasses.com\/blog\/?p=6580"},"modified":"2025-10-07T20:17:39","modified_gmt":"2025-10-07T14:47:39","slug":"difference-between-rights-shares-and-bonus-shares","status":"publish","type":"post","link":"https:\/\/scholarsclasses.com\/blog\/difference-between-rights-shares-and-bonus-shares\/","title":{"rendered":"Difference Between Rights Shares and Bonus Shares (6 Points)"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e0d684a6cb5\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e0d684a6cb5\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-rights-shares-and-bonus-shares\/#Difference_Between_Rights_Shares_and_Bonus_Shares\" >Difference Between Rights Shares and Bonus Shares<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-rights-shares-and-bonus-shares\/#Meaning_of_Rights_Shares\" >Meaning of Rights Shares<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-rights-shares-and-bonus-shares\/#Meaning_of_Bonus_Shares\" >Meaning of Bonus Shares<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-rights-shares-and-bonus-shares\/#Difference_Between_Rights_Shares_and_Bonus_Shares-2\" >Difference Between Rights Shares and Bonus Shares<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading has-text-align-center has-black-color has-text-color\"><span class=\"ez-toc-section\" id=\"Difference_Between_Rights_Shares_and_Bonus_Shares\"><\/span><strong>Difference Between Rights Shares and Bonus Shares<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Meaning_of_Rights_Shares\"><\/span><strong>Meaning of <strong>Rights Shares<\/strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong><em>When a company wants to raise further capital, it can issue shares to its existing Equity shareholders in proportion to their existing shareholding. Such an issue of shares is called as \u2018Rights Issue\u2019 of shares<\/em><\/strong>. Whenever a company makes further issue of shares, the existing Equity shareholders have \u2018pre-emptive rights\u2019 to subscribe to the new shares offered by the company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Meaning_of_Bonus_Shares\"><\/span><strong>Meaning of <strong><strong>Bonus Shares<\/strong><\/strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong><em>Bonus shares are fully paid shares issued free of cost to the existing equity shareholders in proportion to their shareholdings<\/em><\/strong>. Usually financially sound companies issue Bonus Shares out of their accumulated distributable profits or reserves. Hence as the profits or reserves are capitalized, it is also called as \u2018Capitalisation of Profits or Reserves\u2019.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" data-src=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/09\/Difference-Between-Rights-Shares-and-Bonus-Shares-2-1024x576.jpg\" alt=\"Difference Between Rights Shares and Bonus Shares\" class=\"wp-image-6586 lazyload\" title=\"\" data-srcset=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/09\/Difference-Between-Rights-Shares-and-Bonus-Shares-2-1024x576.jpg 1024w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/09\/Difference-Between-Rights-Shares-and-Bonus-Shares-2-300x169.jpg 300w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/09\/Difference-Between-Rights-Shares-and-Bonus-Shares-2-768x432.jpg 768w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/09\/Difference-Between-Rights-Shares-and-Bonus-Shares-2-1536x864.jpg 1536w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/09\/Difference-Between-Rights-Shares-and-Bonus-Shares-2-640x360.jpg 640w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/09\/Difference-Between-Rights-Shares-and-Bonus-Shares-2.jpg 1920w\" data-sizes=\"(max-width: 1024px) 100vw, 1024px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1024px; --smush-placeholder-aspect-ratio: 1024\/576;\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-fixed-capital-and-working-capital\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/difference-between-fixed-capital-and-working-capital\/\" target=\"_blank\" rel=\"noreferrer noopener\">Difference Between Fixed Capital and Working Capital<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-owned-capital-and-borrowed-capital\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/difference-between-owned-capital-and-borrowed-capital\/\" target=\"_blank\" rel=\"noreferrer noopener\">Difference Between Owned Capital and Borrowed Capital<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-debenture-and-share\/\" target=\"_blank\" rel=\"noreferrer noopener\">Difference Between Debenture and Share<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-preference-shares-and-equity-shares\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/difference-between-preference-shares-and-equity-shares\/\" target=\"_blank\" rel=\"noreferrer noopener\">Difference Between Preference Shares and Equity Shares<\/a><\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading has-text-align-center\"><span class=\"ez-toc-section\" id=\"Difference_Between_Rights_Shares_and_Bonus_Shares-2\"><\/span><strong><strong><strong>Difference Between Rights Shares and Bonus Shares<\/strong><\/strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Points<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong><strong><strong>Rights Shares<\/strong><\/strong><\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong><strong><strong>Bonus Shares<\/strong><\/strong><\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">1) Meaning<\/td><td class=\"has-text-align-center\" data-align=\"center\">In rights issue, shares are offered to the existing equity shareholders i.e. Company offers the shareholders the first option to buy the shares of the company.<\/td><td class=\"has-text-align-center\" data-align=\"center\">Bonus shares are issued to the<br>existing equity shareholders free<br>of cost.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">2) Payment<\/td><td class=\"has-text-align-center\" data-align=\"center\">Subscribers have to pay for the<br>Rights Shares. Company only<br>gives them a right to buy these<br>shares.<\/td><td class=\"has-text-align-center\" data-align=\"center\">Bonus shares are issued free of<br>cost to the shareholders.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">3) Partly \/ fully paid up shares<\/td><td class=\"has-text-align-center\" data-align=\"center\">Shareholders have to pay for these shares as Application Money, Allotment, Call Money etc. till the full money on shares is paid up.<\/td><td class=\"has-text-align-center\" data-align=\"center\">Bonus shares are fully paid up<br>shares. So no money has to be<br>paid by the shareholders to the<br>company.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">4) Minimum Subscription<\/td><td class=\"has-text-align-center\" data-align=\"center\">Company has to obtain minimum<br>subscription. If the company fails<br>to receive minimum subscription,<br>it has to refund the entire<br>application money received.<\/td><td class=\"has-text-align-center\" data-align=\"center\">There is no minimum subscription<br>to be collected as Bonus shares<br>are issued free of cost by the<br>company.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">5) Right to Renounce<\/td><td class=\"has-text-align-center\" data-align=\"center\">The shareholders can renounce<br>his shares.<\/td><td class=\"has-text-align-center\" data-align=\"center\">Shareholders cannot renounce his<br>bonus shares.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">6) Purpose of Issue<\/td><td class=\"has-text-align-center\" data-align=\"center\">The rights issue is done by a<br>company when it wants to raise<br>fresh funds but wants to give a<br>chance to their existing members<br>to increase their shareholding.<\/td><td class=\"has-text-align-center\" data-align=\"center\">When company has accumulated<br>huge profits or reserves and<br>company wants to reward its<br>existing Equity shareholders,<br>company issues Bonus shares.<\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":6586,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[10],"tags":[2648],"class_list":["post-6580","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-educational-blogs","tag-difference-between-rights-shares-and-bonus-shares"],"_links":{"self":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/6580","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/comments?post=6580"}],"version-history":[{"count":5,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/6580\/revisions"}],"predecessor-version":[{"id":39349,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/6580\/revisions\/39349"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media\/6586"}],"wp:attachment":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media?parent=6580"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/categories?post=6580"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/tags?post=6580"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}